Bad week for the record biz. In one three day span, the industry news revealed Madonna’s defection from Warner Bros. to Live Nation, which doesn’t even call itself a label, followed by the successful release of Radiohead’s album directly to its fans (with no price tag attached), followed by today’s announcement that industry legend Ray Davies will follow Prince’s example by releasing his latest album as a prize giveaway with a London tabloid.
It’s ugly out there, kids. That crashing sound you hear is the record industry crumbling under its own irrelevance, and the bigger the companies are, the harder they will fall. Heard a story today about a major label president who started an A&R meeting by switching off the lights in the conference room. He was trying to make a point– either the label better find some hits fast, or it’s lights out. Warn your A&R friends– better cancel that lunch at the Ivy.
What does all this have to do with Music Publishing (which is our topic here, right?)? The short answer: Nothing. And that’s my point. As the major record labels watch their collective lives flash in front of their glazed eyes, it’s tempting to look at the music biz as an industry in crisis. Well, a crisis it may be– but so far, it’s a contained crisis, and the safe ground just happens to be Music Publishing.
It’s not that many of the problems of the labels don’t apply to publishing. Certainly, the prospect of people taking music for free doesn’t work any better for publishers than it has for record companies. But so far, despite plummeting record sales, income for publishers continues to rise– ASCAP and BMI have both posted increased earnings this year, thanks to those hundreds of cable channels, pay per views, satellite radio stations, and other public performance venues that just keep cropping up. Advertisers continue to rely increasingly on songs, often by relatively unknown artists like Feist, to brand their products. Gamers use music, karaoke singers use music, greeting cards play songs, and all of that makes publishers considerably happier than their fellow music business weasels down the hall.
Herein lies the rub. It’s sometimes very difficult for someone like myself, who has been in the industry, on both the record and publishing sides of the fence, to separate the two businesses. We’re all part of the same industry– in many cases, publishers and label folk share offices, lunches, late night drinks at seedy nightclubs, and friendships that go back decades. When things are going bad upstairs at the label office, it’s hard to feel secure down on the publishing floor. For so many years, our fortunes have been tied together, so it’s hard to divorce now.
Last week, I spoke to a couple of investment advisors for a large European pension fund. They were considering investing in one of the many hedge funds that are now actively acquiring music publishing catalogues, and wanted to learn more about the industry. That’s right– with all the talk of crisis in the music industry, bankers are now clamoring to enter the publishing business. In talking with these gray-suited whiz kids, I realized that their greatest asset is having zero experience in the music industry. By standing outside of it, they can see with a kind of clear-eyed optimism. Here’s what they’re looking at:
The record company model may be so broken that no amount of tinkering can get it running again. But the music publishing industry is an entirely different business. Because it’s tied to the song, rather than the physical product (CDs), it’s able to adapt to, and profit from a future where music is instantly accessible, and ever-present.
If you don’t really know what music publishing is– don’t worry. That’s what Pub Talk will be about: how to turn songwriting into a business. You can be sure that most record industry people don’t know much about it either. But they’ll learn. They have to. And so do you.
